Tesco boss Dave Lewis rules out further overseas disposals despite Booker deal

A number of analysts had suggested that the proposed £3.7bn acquisition of the wholesale giant would increase Tesco’s focus on the UK and prompt it to offload more of its non-core divisions overseas.

Tesco has already sold its Korean Homeplus business and its Kipa stores in Turkey as part of Lewis’ efforts to streamline its portfolio.

But Lewis today dismissed the analysts’ notes as “speculation” and insisted there would be no more disposals.

Speaking after Tesco unveiled a 29.9% spike in group operating profit before exceptional items to £1.28bn, Lewis said: “We did our business review when Alan [Stewart, Tesco’s finance boss] and I came in. We’ve set a course internationally, we’ve made calls on Korea and Turkey.

“We are not looking at more disposals. In the retail operations that we’ve got, we have plans to improve them.”

Dave Lewis, Tesco

“We talked about the fact that our international review was over – and it is.

“There are teams that are in place who are pursuing plans that all create value for Tesco shareholders. We just have to concentrate on delivering them.”

Lewis added: “We are not looking at more disposals. In the retail operations that we’ve got, we have plans to improve them.

“The challenges we face in Poland require us to adjust that plan and I was there last week with the new management team looking at exactly those plans.

“I hear the speculation, but the key word is that it’s speculation.”

Confidence

Lewis hailed Tesco’s full-year operating profit as “a significant step on from where we were” and said the figures should give the City confidence that the grocer continues to focus on its core business, despite having already worked on the Booker deal for more than a year.

Two of Tesco’s largest shareholders, Schroders and Artisan Partners, wrote to Tesco chairman John Allan urging him to pull the plug on the deal.

The firms believe the acquisition would distract the supermarket giant from its turnaround efforts and claimed the price being paid for Booker would make creating value “extremely challenging”.

But Lewis said: “The results today should give everybody confidence that as a management team, we are completely, completely focused on the continued turnaround of the business.

“We’ve been very open about the fact that we have set ourselves some milestones of what we want to do over the next three-and-a-half years, and we are happy that we have met those milestones and actually exceeded them.

“Hopefully our shareholders and other stakeholders can see that the team continues to deliver and that we have a very clear plan of what it is we want to deliver together.”